TATA CONSULTANCY SERV LT ranked better than it's peers today. It delivered +0.84% to close at 1902.45. During the last week it fell by -1.68% and saw a maximum drawdown of -3.21% before bouncing back.
Buy-and-Hold investors in TCS experienced a maximum drawdown of -20.24% over the last three months. It fell by -5.35% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +0.83%.
TCS has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 17 Jul, 2017 to 1 Oct, 2018. Over the last 2 years and 11 months, TCS outperformed the NIFTY-50 index on 51% days.
During the last three months TCS delivered profits on 53% days. However, it still managed to end this period in a loss. It's best return during this period (of +4.53%) was on Monday, 24 Sep, 2018. While it's worst loss in the same period (of -4.53%) was on Thursday, 4 Oct, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 20 Aug, 2018 and went on till 30 Aug, 2018. This bullish trend returned +3.55% to investors.
During the last year TCS had 7 profitable months and 5 loss making months. TCS returned profits in more months than NIFTY-50 index. TCS significantly outperformed NIFTY-50 index in Apr 2018, when it returned +21.67% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TCS had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Jun 2018 to Sep 2018) during which period it delivered +23.36%. It is interesting to note that both TCS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Try not to become a man of success. Rather become a man of value.
-- Albert Einstein
TCS is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in TCS's volatility from 24 Aug, 2018 to 5 Oct, 2018. While there was a significant surge in the NIFTY-50 index's volatility from 21 Aug, 2018 to 8 Oct, 2018.
Advanced/professional short-term investors should note that TCS has significant positive skewness in it's return distribution. This indicates that investors can expect TCS to recover from drawdowns quickly. Which makes TCS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in TCS derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.
TCS has more chance of extreme outcomes than the NIFTY-50 index. Therefore, TCS must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than TCS.
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